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Bates was born in Memphis, Tennessee, the youngest of three daughters of Bertye Kathleen (née Talbot), a homemaker, and Langdon Doyle Bates, a mechanical engineer.[1] Her great-great-grandfather was an immigrant from Ireland to New Orleans and served as President Andrew Jackson's doctor.[2] She graduated from White Station High School, and later attended Southern Methodist University, where she majored in theatre, was a member of Alpha Delta Pi sorority, and graduated in 1969. She moved to New York City in 1970 to pursue an acting career.[3]

Bates's first feature film was the 1971 Miloš Forman comedy Taking Off (credited as "Bobo Bates"), wherein she sings an original song "Even Horses Had Wings." Bates's next feature was the 1978 Dustin Hoffman vehicle Straight Time. (In 1990, she would appear again with Hoffman in Warren Beatty's Dick Tracy as a stenographer.) Bates continued to appear in little-seen films such as Summer Heat and The Morning After while guest-starring in television shows such as L.A. Law before landing the role of obsessed fan Annie Wilkes, who holds her favorite author (played by James Caan) captive, in the 1990 thriller Misery. Based on the novel of the same name by Stephen King, she received her first Academy Award nomination for that role, winning Best Actress. Soon after, she starred with Jessica Tandy in the acclaimed 1991 movie Fried Green Tomatoes.

In 1977, she made her soap opera debut as Phyllis on NBC's soap opera The Doctors. From 1983 to 1984, she played prison inmate Belle Bodelle on All My Children and from 1984 to 1985, she played Evelyn Maddox on One Life To Live.

In 1995, she turned in another applauded portrayal as the title character in Dolores Claiborne, a film adaption of another Stephen King novel, although she was not nominated for an Oscar. In 1997, Bates played Margaret "Molly" Brown in James Cameron's Titanic. Based on the 1912 sinking of the RMS Titanic, the film went on to earn more than $1.8 billion in box-office receipts worldwide.[4]

Bates also excelled in her role as the acid-tongued "dustbuster" political advisor Libby Holden in the 1998 drama "Primary Colors" which was adapted from the book in which political journalist Joe Klein recounted his experiences on the Presidential campaign trail in 1991–1992. For this performance, she received her second Academy Award nomination, for Best Supporting Actress, though she did not win. She was nominated again, in 2002, for About Schmidt, and did not win. More recently, she and Terry Bradshaw played the parents of Matthew McConaughey's character in the 2006 film Failure to Launch. Bates was also featured in an uncredited cameo in the miniseries of Stephen King's The Stand.

She appeared on 10 episodes of the HBO cable television series Six Feet Under for which she received an Emmy Award nomination for Outstanding Guest Actress in a Drama Series, as Bettina, in 2003. She also was nominated for Outstanding Guest Actress in a Comedy Series for 3rd Rock from the Sun in 1999, the same year that she was nominated for Outstanding Directing in a Miniseries or Movie for the Dashiell Hammett-Lillian Hellman biopic Dash & Lilly. She currently has a recurring guest role on the American version of The Office as Jo Bennet, the head executive of the company that buys Dunder Mifflin known as Sabre.

Bates was diagnosed with ovarian cancer in 2003, but she did not reveal her illness to the general public until 2009.[12] She stated she has been "in total remission" for over 5 and a half years, as of January 2009.[13]